In a perfect world, you would never face an audit from the Internal Revenue Service, or IRS. In reality, it is possible that your return could be randomly selected by the agency for review. If it is and you are not pleased with the results of the audit, here is what you need to know.
Can You Appeal the Audit?
The results of an audit are not final right away. You have a period of time following the audit to either pay up what the IRS claims you owe or file an appeal. If you choose to file an appeal, it is important that you carefully weigh the pros and cons of doing so before taking action.
An appeal is a good way to overturn an unjust decision. If the appeals officer sides with you, you could potentially save hundreds of dollars just by being in the right. Appealing also gives you time to raise funds to pay the IRS what you owe.
There are a few drawbacks to appealing though. The biggest is that the appeals officer has the responsibility of going over all of your financial records with a fine tooth comb. It is possible that he or she finds a discrepancy that was previously missed by the auditor. As a result, you could end up owing even more money to the IRS.
How Can You Win the Appeal?
If you have weighed both the pros and cons of appealing and decided to go for it, it is important that you carefully prepare for the process. Remember, you want to get through the experience owing nothing or with a decrease in what the IRS says you owe.
You need to collect every financial document that you can that backs up the return you filed. When talking to the auditor, you need to be able to show proof of why you took every credit and deduction on the return.
For instance, if you took a medical expenses deduction, collect receipts from your medical care providers and pharmacies. Add it up and ensure that you can account for every penny you claimed.
You also need to focus on being honest. If the auditor determines that you are being less than truthful, you could possibly face further penalties.
If you have not secured legal help, consult with a tax attorney like Dermot F Kennedy. He or she has experience with audits and can review your documentation with you to ensure you are prepared. The attorney can even attend meetings with the auditor to guarantee that you are being fairly assessed.